Report: American Apparel To Transfer Control To Hedge Fund

Embattled American Apparel Inc. (NYSE: APP) agreed to transfer control to a hedge fund in exchange for saving the company from imminent default, according to the New York Post.Earlier Monday, it looked as if Dov Chaney had teamed up with the investment group in an effort to regain control of the company in a plan that had been broadly disclosed June 25.Hedge fund Standard General, headed by Sooyung Kim, acquired a 10 percent stake in American Apparel in open market purchases June 26-30 at prices ranging from 71 cents to 90 cents a share.Standard said in its filing that it would "act as a group" with Chaney. But the fund emphasized "this transaction is not about the founder, nor is it an endorsement of him. He can no longer vote his shares without our consent."Chaney disclosed last week that he had boosted his personal stake in the company to 43 percent.The Post reported that American Apparel agreed to shift control to Standard, but that Chaney's future with the company remains uncertain. A lender had accelerated repayment demands on a $10 million loan that defaulted with Chaney's ouster last month.American's reported agreement with Standard would make irrelevant its poison pill plan approved June 28.In after-hours trading, American changed hands recently at 90 cents a share, up 1.69 percent.